Oil joins the festive rally

In mid-morning trading the FTSE 100 is 50 points higher, as the pre-Christmas rally continues on its merry way.

City of London
Source: Bloomberg

The City is quietening down rapidly, while the corporate and economic calendars are emptying too. Yet there are still buyers active, as the year-end window dressing pushes major indices higher. The recovery of the past week in indices has been remarkable, with the potential for more given thin trading and the sparse calendar.

Greece’s premier has assuaged concerns by offering concessions if his presidential candidate is elected, while Saudi Arabia appears to be reaching the end of its tether where oil prices is concerned, as it takes a leaf out of the eurozone’s book and blames ‘speculators’ for the price action in oil over the past half a year.

Such an approach rarely wins the confidence of markets, even if the oil price has joined in the general year-end festivities, with Brent making yet another attempt to hold above the $60 level. As oil prices rise, the usual suspects are at the top of the FTSE leaderboard, such as Tullow, Weir and BP, with the bargain basement prices on offer here tempting a few hardy souls.

The Dow sits only around 0.7% from the record high of 5 December, suggesting that another trip to the 18,000 level is more than likely before the US shuts down for Christmas. At least economic figures from the US are still coming in with some degree of regularity, with tomorrow’s GDP and durable goods numbers being the weightiest events of the week. Ahead of the open, we expect the Dow Jones to start 47 points higher at 17,851.

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